Apple (AAPL.O) announced on Tuesday that it plans to ask a U.S. judge to dismiss a lawsuit filed by the Justice Department and 15 states in March. The lawsuit alleges that the iPhone maker monopolized the smartphone market, harmed smaller rivals, and drove up prices.
In a letter to U.S. District Judge Julien X. Neals in New Jersey, Apple stated, “Far from being a monopolist, Apple faces fierce competition from well-established rivals, and the complaint fails to allege that Apple has the ability to charge supra-competitive prices or restrict output in the alleged smartphone markets.”
Apple argued that the DOJ relies on a new “theory of antitrust liability that no court has recognized.” The government must respond within seven days to Apple’s letter, as the court requires parties to submit such letters to expedite cases before advancing to potentially more robust and expensive dismissal efforts.
The Justice Department accuses Apple of using its market power to extract more money from consumers, developers, content creators, artists, publishers, small businesses, and merchants.
Illegal monopoly
The civil lawsuit claims that Apple maintains an illegal monopoly on smartphones by imposing contractual restrictions and withholding critical access from developers.
The Justice Department, which has not commented immediately, previously stated that Apple charges as much as $1,599 for an iPhone and earns a larger profit than any rival. Officials also alleged that Apple imposes hidden charges on various business partners, including software developers, credit card companies, and rivals such as Alphabet’s (GOOGL.O) Google, ultimately raising prices for consumers.
Apple rejected the government’s claims that the iPhone has kept consumers “locked in” to the devices. “Someone unhappy with Apple’s limitations has every incentive to switch to competitor platforms that ostensibly do not have those limitations,” Apple stated in the letter.
Attorney General Merrick Garland said in March, “Consumers should not have to pay higher prices because companies violate the antitrust laws. If left unchallenged, Apple will only continue to strengthen its smartphone monopoly.”
